Please ensure Javascript is enabled for purposes of website accessibility

Unloved Stocks Ready to Shine

By Rich Duprey - Updated Apr 5, 2017 at 7:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

What are the best CAPS players recommending now?

Think of investor sentiment as a pendulum that swings in tandem with a company's share price. When investors begin to think highly of your company, its stock might also start heading in the right direction. Alas, you can rarely tell when investors are warming to a stock until after it's made that upward swing.

An astrolabe for investors
But Motley Fool CAPS' proprietary ratings, aggregated from the opinions and accuracy of 120,000-plus members, offer a great way to monitor investor sentiment. Like astronomers scanning the skies, investors can follow a stock's stars through its CAPS rating trend, tracking investor sentiment to help determine the best time to invest. Data suggests that CAPS' highest-rated stocks performed best, while the lowest-rated did worst. Let's look at companies whose ratings have recently risen from the one- or two-star doldrums, and see whether the stars truly are aligning in their favor.

Company

CAPS Rating (out of 5 max)

Recent Price

Next Year EPS Growth

Canadian Solar (NASDAQ:CSIQ)

***

$5.52

(55%)

Human Genome Sciences (NASDAQ:HGSI)

***

$1.76

51%

Royal Bank of Scotland (NYSE:RBS)

***

$19.03

NA

Seabridge Gold (AMEX:SA)

***

$10.28

NA

YRC Worldwide (NASDAQ:YRCW)

***

$4.05

(3%)

Source: Motley Fool CAPS, Yahoo! Finance.

Obviously, this is not a list of stocks to buy -- just a starting point for further research. Yet if some of the best investing minds are taking notice of these stocks, maybe we should, too.

The sun's always shining somewhere
Trucking company YRC Worldwide is struggling in the current climate, so it's seeking a distressed purchase of all of its publicly traded outstanding debt. Ratings agency Moody's (NYSE:MCO) suggests that move will be problematic, since YRC will then have to refinance it in a few years. Still, CAPS member teamsterjoe finds a lot to like in YRC's management:

Because the upper management at Yellow Freight is top notch. The number one concern at Yellow is the labor cost. They have asked for concessions from the Teamsters and the Teamsters have tentatively agreed but the membership will never agree to a direct pay cut. Although they may agree to an ESOP with a laid-off employee relief fund. Which means Yellow will have to do everything they can to get the price of their stock up just like they did to get the price of their stock down to get the Teamsters to the table. Yellow is one of the most under valued stock in the Fortune 500.... What people don't realize and what gets by investors is Yellow's business dealings with DHL and the fact that DHL left the United States and LTL business went to Yellow.... Yellow is a top notch company with a good track record.

Although it hasn't gotten the same attention on this side of the pond, Great Britain has been engaged in a series of maneuvers to bolster its financial system as well. Its government has taken an equity stake in Royal Bank of Scotland, and agreed to buy up any shares of Lloyds TSB (NYSE:LYG) and HBOS that those companies could not sell under the U.K.'s bailout plan.

Much like the bailouts orchestrated here, there's a certain national reputation on the line in preventing these institutions from going under, particularly once assistance has been funneled to them. CAPS member getrichdietrying figures that since the U.K. government now owns RBS, it won't allow it to fail:

It's at below 20, [government basically] owns it. The Gas station company I work at has [Royal Bank of Scotland] for all their transactions. The government will not let it fail, and that's why they are buying. I own all the stocks I rate.

Shine your starlight
Are these stocks shining brightly, or ready to burn out? To find out, start your research with Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Then weigh in with your own thoughts on which stocks you think are shooting stars or supernovas. It's free to sign up and post your thoughts, so why not use this opportunity to take your star turn?

YRC Worldwide is a Motley Fool Hidden Gems Pay Dirt pick. Moody's and Lloyds TSB Group are Inside Value selections. Moody's is also a Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his complete holdings. The Motley Fool has a stellar disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

NatWest Group Stock Quote
NatWest Group
NWG
$6.48 (1.25%) $0.08
Yellow Corporation Stock Quote
Yellow Corporation
YELL
$7.60 (-2.69%) $0.21
Moody's Corporation Stock Quote
Moody's Corporation
MCO
$322.97 (1.69%) $5.37
Canadian Solar Inc. Stock Quote
Canadian Solar Inc.
CSIQ
$41.90 (2.32%) $0.95
Seabridge Gold Inc. Stock Quote
Seabridge Gold Inc.
SA
$14.02 (3.09%) $0.42
Lloyds Banking Group plc Stock Quote
Lloyds Banking Group plc
LYG
$2.23 (0.45%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.